Question: The efficiency variance computed on a three variance approach is equal to the efficiency variance computed on the four variance approach equal to the variable

The efficiency variance computed on a three variance approach is equal to the efficiency variance computed on the four variance approach equal to the variable overhead spending variance plus the efficiency variance computed on the four variance approach computed as the difference between applied variable overhead and actual variable overhead computed as actual variable overhead minus the flexible budget for variable overhead based on actual hours worked

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Overhead Variances The analysis of factory overhead variances is more complex than variance analysis for direct materials and direct labour theres no standardisation of the terms or methods used for c... View full answer

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